The Pilot's Lounge #29:Used Airplanes — Buyer, Be Cynical

Thousands of used aircraft trade hands each year. Many owners do their homework and end up with an aircraft that will meet their needs. Others, perhaps in a hurry or hoping to save a few dollars, try to find a shortcut or two or accept an unscrupulous dealer's assurances about the aircraft they buy. AVweb's Rick Durden, an aviation attorney in real life, has seen way too many purchasers who went about this process all wrong. If you're thinking about buying an aircraft in the near future, you need to read what he has to say.

About the Author ...

Rick Durden is a
practicing aviation attorney who holds an ATP Certificate, with a type rating
in the Cessna Citation, and Commercial privileges for gliders, free balloons
and single-engine seaplanes. He is also an instrument and multi-engine flight
instructor. Rick started flying when he was fifteen and became a flight
instructor during his freshman year of college.

He did a little of everything
in aviation to help pay for college and law school including flight
instruction, aerial application, and hauling freight. In the process of trying
to fly every old and interesting airplane he could, Rick has accumulated over
5,400 hours of flying time. In his law practice, Rick regularly represents
pilots, fixed base operators, overhaulers, and manufacturers. Prior to
starting his private practice, he was an attorney for Cessna in Wichita for
seven years.

He is a regular contributor to Aviation Consumer and AOPA Pilot
and teaches aerobatics in a 7KCAB Citabria in his spare time. Rick makes it
clear he is part owner of a corporation which owns a Piper Aztec — because,
having flown virtually every type of piston-engine airplane Cessna
manufactured from 1933 on, as well as all the turboprops and some of the jets,
he cannot bring himself to admit to actually owning a Piper.

It's
another one of those nights when I've stayed here in the Pilot's Lounge after
everyone has gone home. Tonight it is because I am still seething. I don't
want to get into my car because the level of anger I have over a case I
settled this afternoon is still building. I have no business driving.

My client, a first-time airplane buyer, was taken in by a broker who
assured him that the low price on the airplane he had for sale was simply
because he needed to move it fast, before interest ate him up. The buyer
agreed to buy the airplane without seeing it. He then allowed the broker to
select the mechanic to do a prebuy inspection. The buyer was told that the
airplane passed the inspection with flying colors. At that point the buyer
went to pick up his new acquisition. He got it home and everything proceeded
to break. Once he had his mechanic open things up he also learned the wings
were full of corrosion. That's when I got involved.

Of course, once suit was filed, the mechanic claimed that he had only done
an oil change and produced paperwork showing that he had only performed, and
charged for, an oil change. Over the course of three years, the buyer put
substantial money into the airplane to repair corrosion damage, replace
corroded parts and prevent further corrosion. After a lot of work, I was able
to get some of the buyer's money back, but not all.

He took one heck of a financial hit and I again had to deal with the slimy
underworld that taints parts of aviation. The only thing I had to look back on
that didn't make me angry about the case was that the broker involved was no
longer selling airplanes.

Taking Precautions

The
more I thought about the case, the madder I got. There are a just too many
lowlife individuals out there peddling airplanes. I've seen it year after
year. There are a lot of books on buying used airplanes but few people seem to
be reading them. As a lawyer, I make money from lawsuits; however, suits
involving airplane buyers who get fleeced are just plain ugly. Crooked
sellers, knowing that it is often effective to go on the offense right away,
make all sorts of false statements that have to be dealt with, one by one.
That sets off the buyer and the battle gets nasty fast. The nature of the
beast is that the buyer almost never gets back all of the lost money.

All in all, I would prefer that buyers take some precautions to avoid
buying a dog dressed as an airplane in the first place and never have to
retain me. So, while I'm good and angry, here are some ideas I've got on the
subject of buying a used airplane. I know they won't cover everything and it's
impossible to fully protect yourself from a crook, but maybe they will get you
thinking when you decide to buy a used airplane.

Be Cynical

Understand out of the box that there is a tremendous amount of junk out
there. While a number of manufacturers are churning out new airplanes, the
vast majority of the ones we can afford to buy are just plain old. In the late
1960s, there was a tremendous debate as to whether we should continue to allow
World War II aircraft to fly as they were over 20 years old, a shocking age at
the time. Now, if you can find a good, used airplane that is less than 20
years old, at a decent price, it is unusual.

My livelihood involves being around aircraft. I see some beautiful
airplanes on a day-to-day basis but I also see the poor state of maintenance
of way, way too many airplanes. It is expensive to keep airplanes in good
shape and pilots too often either don't have the money or the inclination to
do so. At a nearby FBO, I am watching an airplane of a type that I've lusted
over for years being parted out because the owner was too cheap to either
hangar it or reseal the windows as he was warned to do at the last annual.
Rainwater had come in through the worn window seals and corroded the airframe
beyond economical repair. Had that owner been less ethical, he could have
probably unloaded it cheaply on an out-of-state buyer who would think he was
getting a deal. By selling it out of state, the cost to the buyer to come back
here and sue would add so much to the expense of the case as to make it not
worth pursuing.

Most of us fly because we enjoy it tremendously and like the people we
meet. Most pilots are extremely honest. They expect other pilots to be honest.
Most are, but a certain percentage, when it comes to selling airplanes,
aren't.

A lot of crummy airplanes have been given a quick paint job to cover the
warts. We all like a good-looking airplane. But, as Ernie Gann once said,
"A whore is easy to meet." There are a lot of painted ladies out
there. If an airplane looks too attractive, and seems too good to be true, I
hope your internal alarm system works, otherwise you are going to be paying to
fix a diseased body.

Budget

Decide
how much you can afford to spend on an airplane before you start to look.
Then, and I can't say this vehemently enough, set aside at least one quarter,
even better, one third, of that sum for repairs that you will have to make to
the airplane in the first year. Put it in a bank account and forget you even
have it until the airplane is home and in your hangar or on your tiedown. Then
you will need every penny of it. There are going to be problems you just plain
missed on the prepurchase inspection. Things are going to break. In addition,
you are going to find that your own tastes and preferences in the airplane are
different than those of the previous owner so you are going to have to fix
some things the previous owner felt were not worth fixing.

Avoid Buying Sight-Unseen

Resolve that you will not buy an airplane sight unseen unless you are also
willing to put 50 percent of the money you have left in your budget into
another bank account for the needed repairs and lawsuit when you actually get
the airplane in hand. Let's put it this way: There aren't any super deals to
be had on far-away airplanes. If the airplane were great and way under-priced,
the locals would have grabbed it long ago. This isn't rocket science. If the
locals haven't snatched that wonderful, colossal airplane that is priced 50
percent too low, why are you frantically trying to buy it without even seeing
it? Always keep in mind that there is garbage out there that people want you
to buy. In every single lawsuit in which I've been involved over an airplane
sale, the airplane was purchased sight unseen. I respectfully suggest that if
you don't have the money to transport yourself AND your mechanic to look an
airplane over, you probably don't have the money to fix it after it arrives.

If the airplane is to be delivered to you, the only safe way is to enter
into a written agreement that says you do not have to accept it unless it
passes a prepurchase inspection with your mechanic and that the seller is on
the hook for transportation of the airplane both ways should the airplane fail
the prepurchase inspection. (At the same time, the law imposes an obligation
on you to act responsibly once the seller has flown the airplane all the way
to you and not refuse it just because the interior color is just a shade
lighter tan than will match your Dockers.) Smart buyers also provide in that
written agreement that it is enforceable against the seller in a court in the
buyer's state. Suing a seller in his state is expensive. Yes, if the airplane
passes inspection and you buy it, the usual custom is for you to pay for the
airline ticket to get the seller home.

Get The Historical File On The Airplane

Once
you find an airplane that interests you, order the entire aircraft file from a
company that does title searches. I use the AOPA's service for this task. They
know what they are doing and can do it fast; in fact, they can usually fax the
documents to you within two or three days of your call. I suggest that you
order a copy of the entire FAA aircraft file, not just request a title search.
A title search, while essential to tell you if there are any liens on the
airplane (the seller must prove to you that he will deal with all of them to
your satisfaction before you agree to buy the airplane), is just part of the
picture. A title search is done by examining the documents in the FAA files.
What you want is a copy of all of those documents, all of the bills of sale
for the transactions before you, the liens on the airplane, and their releases
as well as the FAA Form 337s for major repairs and alterations.

You want to know where the airplane lived out its life before you.
Corrosion is probably the most serious problem facing older airplanes. Did it
spend years on the Florida coast or was it high and dry in Arizona? Call up
the previous owners and talk to them about the airplane. The 337s will show
such mundane things as radio installations, but also such interesting things
as STCs and nasty little things such as replacement of wing skins, a strut,
fuselage skin and windows following a crunch that may not be explained, or
even referenced, in the logbooks. If the airplane is advertised with no damage
history and that is important to you, you have just saved yourself a boatload
of trouble. If it isn't important, you have ammunition on negotiating purchase
price.

"Fresh Annual," Anyone?

I recommend that any potential buyer be extremely suspicious of airplanes
advertised with a "fresh annual." Think hard now; if you were
selling your airplane, how much would you spend on an annual? Would you insist
the mechanic correct every little thing that was wrong? Most of the time this
is window dressing on a barker. It's often a sign that should read, "Look
elsewhere." Besides, you are going to do a prebuy that is so thorough,
that once you have decided to accept the airplane, you will have the mechanic
go ahead and complete an annual inspection because it is already at least 60%
complete anyway, so a "fresh" annual adds no value to the airplane
in your eyes.

Avoid An Airplane With A Newly-overhauled Engine

Treat
any airplane with a "fresh engine overhaul" as if the engine is high
time. You are much, much better off buying an airplane with a run-out engine
and having it overhauled where and how you want it done. It is impossible on a
prepurchase inspection to tell how well an engine overhaul was performed. In a
nutshell, the cost of a good engine overhaul exceeds the boost it gives to the
selling price of the airplane. That's a given. Act accordingly.

Only a fool will put more money into the airplane than he or she expects to
get out of it at the sale. Assume the overhaul is worthless when negotiating.
My rule of thumb is not to consider an overhaul worth its salt unless the
engine has at least 200 hours on it since the overhaul, the owner can produce
oil analysis records (and I talk with the analysis company) and the
compression is at or close to new-overhaul tolerances.

Is A Broker Involved?

Find out if a broker is selling the airplane. If so, look up the N-number
in the AVweb database and call the owner and talk with him or her about the
airplane. Find out why it is being sold. Find out why the owner is willing to
forgo some income on the sale and is using a broker. The owner may not be
honest, but you will probably get some useful information. Brokers don't make
much on fixed-gear, single-engine airplanes, so see what you can find out as
background. I have represented some excellent, honest brokers. Most of them go
where the big money is, to turbine aircraft. I've also sued some real crooks
in the piston-engine aircraft business. At the risk of insulting the honest
brokers — and there are a lot of honest brokers out there (although the
dishonest ones seem to be the quickest to tell you how honest they are) — if
you are dealing with a broker, be very, very careful.

Logbooks

Find out if they are complete. Missing logbooks are not necessarily
disqualifying. In general, missing logs from more than 15 years ago are not
nearly as important as missing logbooks currently. If there are no logs, there
is reason to be suspicious that the airplane was stolen. With any missing logs
you must assume that the airplane has some damage history. It will be up to
you and your mechanic to find the evidence on the prebuy. Most of the time you
won't get access to the logs until the prepurchase inspection, but you can
find out whether they are complete or not fairly early on. If the logs are
incomplete it may be impossible to prove compliance with some or all
Airworthiness Directives (ADs). The assurance of a seller that all ADs have
been complied with is worthless as that airplane is not airworthy unless the
records detail the method of compliance with each and every applicable AD.

What Does New Paint Hide?

If the airplane was recently repainted, the reason was probably to sell it.
Have your mechanic look closely to see if it was done to cover up corrosion.
Figure the paint job will last about half the time a good one will, and that
you'll be looking at paint chipping, cracking and peeling in the first year.
The stripes on the front of my Aztec don't line up when you look at it head
on. I knew it was repainted just before it was sold, but after negotiations
were done, it didn't add anything to the sale price. Unless the airplane has
been on the market for over a year, don't put much stock in a paint job that
is under a year old. You may even want to call the paint shop and find what
was charged for the job versus what is the rate for a top-quality job. Ask
around and find out the reputation of the paint shop.

Weight And Balance

Once
you are getting interested in a specific airplane have the owner fax the
actual weight and balance data to you. Most of the time the actual airplane is
somewhat heavier than the "sample" given in manuals. Find out if the
airplane you are considering can actually carry the loads and fuel quantities
required for the type of flying you intend to do. My airplane partner and I
had to pass on an airplane that we were seriously looking at because it had
150 pounds less useful load than we anticipated and that meant he couldn't
take his family in it.

Get A Current List Of Applicable ADs

As you get very serious, talk to your mechanic about the airplane and get
list and summary of the AD s that apply to the particular bird. Make sure
there are not any repetitive ADs that will wipe out the family fortune, or
that the airplane isn't coming up on some major "pull the wings off and
x-ray everything" AD. If you are satisfied on that point, then you will
also have the list ready to go when you open the logbooks at the prepurchase
inspection and it will minimize the time needed to see whether there has been
compliance with all the ADs.

Agree On A Price, Subject To A Prebuy Inspection

Do your negotiations with the seller and, if you can come to an agreement
on price, put together a written agreement that identifies the airplane,
states the sale price and that the sale is conditioned on successful
completion of a prepurchase inspection and that the price may be adjusted in
further negotiations between the buyer and seller based on the results of the
prebuy. If there is any ferrying of the airplane involved, set out who is
responsible for what costs, both if the airplane fails the inspection and if
it passes and someone needs a way to get home.

The Prebuy Inspection

It is absolutely, positively essential that you have a prepurchase
inspection done by a mechanic or shop that you respect. Never, ever, ever,
ever let the seller select who will do the prepurchase inspection. If you need
to locate a reputable mechanic at a remote location one of the best ways is on
the Internet on one of the better aviation forums such as AVsig on CompuServe.
Putting up an inquiry usually results in some good ideas that will at least
give you some guidance as to whom to call.

Be patient. A good prepurchase inspection is going to take a very full day
on a simple single-engine airplane, and longer for a complex one or a twin.
That's okay, because if it passes the prepurchase inspection and you buy the
airplane you are going to go ahead and complete an annual inspection on the
airplane anyway.

Go into the prepurchase inspection as if you are trying to find a reason to
disqualify the airplane. That is the safer mindset than if you are trying to
find reasons to qualify the airplane. You may like the looks so much that you
use them to qualify and accept an otherwise questionable mount.

The first step in any prepurchase inspection is a detailed examination of
all the logbooks. They must show compliance with every single AD (or the
reason each one does not apply) or someone is going to have to pay for
compliance for any that the records show weren't done before you agree to
accept the airplane. You may find that it's a minor matter, or it may be a big
deal. Lack of AD compliance is a good way to kill a sale very quickly. Going
forward with a purchase where there is question regarding AD compliance is not
one of the smartest things you will do in your life.

For
reasons I have never understood, aircraft and engine logbooks usually do not
have page numbers. Look at each page carefully to see if any have been razored
out. Read each and every entry. This is detective time. Did the airplane sit
dormant for a couple of years? That's a hint that there may be corrosion in
the airframe or in the engine. Was it getting 100-hour inspections every few
weeks? If so, it was probably a trainer, so look over the areas that students
beat up. Your mechanic should be the person to take the lead in the logbook
examination as he or she is more likely to know what to look for than you;
however, you should be heavily involved as two people casting jaundiced eyes
on entries are less likely to miss something than one person.

When was the last time the airplane was weighed? If more than about five
years ago, figure that you will need to have it weighed as old weight data has
an odd way of being very wrong, and often not in your favor.

If the airplane is in annual and you haven't flown it, do so. Do a very
detailed preflight then operate it, following every step in the checklist in a
deliberate manner. Observe how it behaves throughout the speed range down
through stall. How does it track on the ground? Can it be trimmed to fly
hands-off? Is the ball in the center in level flight with the control wheel at
neutral? Are furnishings worn? Do the seats lock in their tracks?

As the inspection proceeds, if you find an absolutely disqualifying factor,
stop the prebuy at that moment; tell the seller why you have stopped and why
the airplane failed. Believe it or not, there have been times that a good
mechanic has found evidence of damage and illegal repairs that have escaped
other mechanics for years, even to the point the current owner had no idea
about the situation because it all happened before he bought the airplane and
he didn't find it. There is no reason to pay for more prepurchase inspection
than you need. There is also the chance that the seller will agree to fix the
problem you identified, in a way that is acceptable to you, and you can
continue the inspection and potentially buy the airplane.

All the time the inspection is going on you and your mechanic should be
making a squawk list of everything you feel needs to be repaired to bring the
airplane up to the level that is acceptable to you.

Your
mechanic will have his or her own procedure for the inspection. Follow along
and learn all you can about the airplane you may be buying. Look in all the
inspection ports, help remove the interior, get to know the airplane;
generally be a hands-on participant in the prebuy inspection. Take notes on
the comments made.

Once your mechanic has finished with the inspection, go off by yourselves
and talk it over. You will have a squawk list in hand and a pretty good
feeling as to whether the airplane is acceptable or not. If it is okay as-is
and the squawks are fairly minor, chances are you can finish up the sale at
the agreed-upon price, and turn your mechanic loose to finish up an annual
inspection. If the squawks are more than about $1,000 worth, and you still
would like the airplane, it is time to discuss how to resolve them with the
seller. One approach is to give the seller the squawk list with the ones you
feel he should fix circled. The seller can either agree or back out of the
deal. (If the sale does not go through you are obligated to put the airplane
back together after the prepurchase inspection is stopped, so that the seller
can fly it away.) You may want to get good estimates of the costs to fix the
various squawks and get a price concession so that your mechanic can fix them
to your satisfaction, or you may want to agree to have the seller do the fixes
needed. If the seller won't agree to fix the squawks or give an appropriate
price concession, the deal is over. If the seller agrees to act on your squawk
list, don't wait a day or two, after he is working on the airplane, and then
try to back out of the deal. Once you gave him the squawk list you have
effectively agreed to accept the airplane when the listed items are fixed.

Closing The Deal

If
the deal is to go forward, write it down. Make two originals. Identify the
airplane by registration and serial number, state the sale price, identify the
buyer and seller, and if there are any outstanding items that either party
must perform, set them out clearly and concisely. A wise seller is going to
state that the airplane is sold "as is, where is," and then write in
large letters that the airplane is sold without any warranties, express or
implied. The intention is to make it clear to the world that the seller is not
going to pay to make any additional repairs to the airplane other than are set
out in the agreement, ever. You the buyer are on the hook for further repairs.
Both of you then sign each original and each keeps one. Then you take care of
the bill of sale and such other transfer paperwork as you may have.

Shake hands with the seller, advise your mechanic to finish up the annual
inspection and take the seller to his flight home. Then get ready to spend the
rest of that money you set aside at the beginning of this effort. You are
going to need it.

Question of the Week

Picture of the Week

As aviation photos go, this was the best this week but there are some great beauty shots when you click through. In the meantime, congratulations to Daniel Gillette for this very nice photo he calls Sunset Pitch-Out. The photo is copyrighted by Gillette.